Insertion of new section 194H

Section 71 of the Finance Act, 2001 deals with insertion of new section 194H. Insertion of new section 194H. 71. After section 194G of the Income-tax Act, the following section shall be inserted with effect from the 1st day of June, 2001, namely:— ‘194H.

Insertion of new section 194H.

71. After section 194G of the Income-tax Act, the following section shall be inserted with effect from the 1st day of June, 2001, namely:—

‘194H. Commission or brokerage.—Any person, not being an indi­vidual or a Hindu undivided family, who is responsible for pay­ing, on or after the 1st day of June, 2001, to a resident, any income by way of commission (not being insurance commission referred to in section 194D) or bro­kerage, shall, at the time of credit of such income to the ac­count of the payee or at the time of payment of such income in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of ten per cent :

Provided that no deduction shall be made under this section in a case where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year to the account of, or to, the payee, does not exceed two thousand five hundred rupees.

Explanation.—For the purposes of this section,—

(i) "commission or brokerage" includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered (not being profes­sional services) or for any services in the course of buying or selling of goods or in relation to any transaction relating to any asset; valuable article or thing, not being securities;

(ii) the expression "professional services" means services rendered by a person in the course of carrying on a legal, medi­cal, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or such other profession as is notified by the Board for the pur­poses of section 44AA;

(iii ) the expression "securities" shall have the meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);

(iv ) where any income is credited to any account, whether called "Suspense account" or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.’.

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Section 71, The Finance Act, 2001.